August 7, 2018 by

Does an £8000 Donation Constitute Political Influence?

Recent revelations by the Guardian about a study conducted in 2012 by the Institute of Economic Affairs (IEA) in Great Britain that strongly recommended relaxing regulations that restrict the practices of British casinos has been called into question because the IEA subsequently received about £8000 in donations from the National Casino Industry Forum (NCIF) a gambling industry organization.


The doubts raised by the quick donation to the IEA after it released its conclusions fall into two categories.  Are £8000 enough to sway the results of a study by a reputable organization and does the donation obviate the conclusions of the study?  By using bonus codes, some gamers can access bonuses larger than £8000!

The Guardian discovered that the research team had shown a draft of the report to industry representatives and had accepted their feedback before releasing the study to the general public.  In the statement that accompanied the release of the study, the IEA did not mention that gambling industry people had been involved in any way with the study.

Two Main Conclusions

The two primary findings in the study are that present regulations serve to slow down or prevent new casinos from being built and that there is a big enough market for land based casinos in Britain that every middling-sized town could have a casino of its own if the regulations were loosened.

These conclusions did not address the question of whether it would be a good thing overall for average sized towns to have a casino.  The conclusions may have been correct that the regulations presently make it harder for casinos to open but it didn’t say exactly why that is a problem.

NCIF

The role of the NCIF in this matter is also murky.  On the one hand, they might be supported by existing casinos which would likely prefer that competing casinos have a harder time getting approval to build and open.  On the other hand, the NCIF is supposed to be a forum for the gambling industry in toto, both existing gambling operations and future gambling operations.

The NCIF announced that it supported the conclusions in the IEA report and felt that presenting these findings through a reputable think tank such as the IEA would have more gravitas with the public than if the NCIF had released the same conclusions under its own name.

The Guardian

This newspaper discovered the involvement of the gambling industry in the preparation of the report by the IEA when it was investigating and reporting on rumors that the IEA had offered, as a fund raising method, “access” to government officials as high on the ladder as ministers to farming interests interested in free trade policy in the aftermath of Brexit.

The Guardian found out that the IEA had arranged for a meeting with Steve Baker, then the Brexit minister, with an American farming interest in exchange for a £35,000 donation to the IEA.

Education Charity

The IEA is officially registered as a charity in the education sector.  If it is found to be using its position and many connections in the government to influence its own conclusions and to further the political desires of unofficial “clients”, it may have to be registered as a political lobbying organization.

At this stage in the story, the issue is a purely political one.

The Effect on Gambling

We should return to the gambling aspect of this emerging contretemps over the reliability of the IEA.  If the IEA does, in fact, be shown to be an unreliable source of intellectual capital, does it mean that the conclusions it reached in the gambling and casino report are false?

A spokeswoman for the IEA said, “It is perfectly legitimate to check facts and data with relevant industry representatives.  This categorically does not mean that they have any sway or influence on the conclusions we come to in our research.”

That statement is prima facie true.  The questions here are whether the IEA was in fact “checking facts and data” and whether the involvement of the industry in the fact-checking process did have some influence on the conclusions even though it is plainly clear that they might not have done so?

An unnamed source claims that an internal document states that the donation was solicited before the release of the IEA’s report and that the NCIF wanted to release the report through a reputable think tank rather than on its own recognizance.  The IEA disputes the existence of such a document and the incriminating evidence alleged to present in the document.

Greenpeace

This organization seeks to nullify all IEA conclusions that support the oil and gas industry as oil and gas interests such as British Petroleum (BP) regularly donate to the IEA.  Greenpeace is making the case that if the IEA is taking money to reach pre-set conclusions in one sphere, it might be doing the same in another.

How Many Casinos are Enough?

Certainly, we don’t know yet what the optimum number of casinos is in Britain or in any other country.  We also don’t know the long term effects of building casinos in smaller communities rather than in rather larger communities.

There are some givens that governments and regulatory bodies recognize generally.

  • People like to gamble.  Some gambling is branded as entrepreneurship or investment but it is also a type of gambling.
  • There are so many ways for people to gamble that adding casinos on the surface should have little effect on overall gambling activity.
  • Casinos often bring out the worst in gamblers and casinos need to be a lot more pro-active in dealing with this problem.
  • Some tax authorities have tried to pass very large tax rates for gambling winnings and casino profits.  This will likely backfire as land based casinos will lose customers to online casinos based outside British legal jurisdiction.

In the End

The IEA may lose its reputation as a reputable and impartial think tank but its conclusions regarding the casino and gambling industries may be true in any case.  Only time will tell on that score.